Why SpaceX's Earnings Miss on Capex Sent Its Stock Down and Nvidia Up

SpaceX's second-quarter earnings beat analyst forecasts on both revenue and profit, but the headline number that moved markets was spending. The company's capital expenditures reached $18.4 billion in the quarter, well above expectations, and investors responded by knocking the stock down more than 7%.

The selloff stands in sharp contrast to Nvidia, which rose more than 3% after Elon Musk said the chipmaker would be SpaceX's "exclusive" partner for its AI infrastructure buildout. The split reaction illustrates the central tension of the current AI expansion: hyperscalers are being punished for runaway capital spending, while the chip suppliers receiving those dollars see their valuations climb.

Musk's endorsement landed as analysts debated what it could mean for Nvidia's revenue. Some calculations suggest the commitment could translate into roughly $200 billion of potential revenue for Nvidia in calendar 2027, based on an assumption of about 6 gigawatts of additional Nvidia computing power. Musk himself cautioned that his estimates are guesses, saying each gigawatt of Nvidia's Rubin systems might generate $30–50 billion in annual revenue, but offering little certainty.

AMD, which had previously been part of SpaceX's hardware plans, fell more than 7% after its own earnings showed second-quarter capex of $808 million—more than double the year-ago level—as the company tries to stay competitive in the AI chip race.

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The AI Capex Trade: What Musk's Nvidia Pledge Means for Revenue and Rivals

The Capex Paradox: Why SpaceX Fell and Nvidia Rose

SpaceX investors are treating the $18.4 billion quarterly capex figure as a signal of mounting costs with uncertain returns. Nvidia investors, by contrast, see the same spending as future revenue. This divergence is not unique to SpaceX; it reflects a broader pattern in AI markets where the companies buying and operating infrastructure face scrutiny over payback periods, while suppliers like Nvidia are rewarded for every commitment made.

Translating Musk's Math: From Gigawatts to $200 Billion

Musk's comments gave analysts a concrete framework. If SpaceX adds roughly 6 gigawatts of Nvidia computing power in 2027, and if each gigawatt costs about $35 billion, that points to close to $200 billion in potential revenue for Nvidia in that single year, according to Wolfe Research's Chris Caso. Melius Research's Ben Reitzes went further, arguing that a credible commitment of this scale could push Nvidia CEO Jensen Huang to formally forecast $1 trillion in annual revenue well before 2030. The catch is that Musk himself described his revenue assumptions as guesswork, and he conceded that his 20-gigawatt target may land closer to 15 gigawatts if projects slip. That makes the $200 billion figure a scenario, not a promise.

AMD's Setback: From Dual-Sourcing to Exclusion

Musk's announcement reverses his May statement that SpaceX would use both AMD and Nvidia processors. The shift helps explain AMD's post-earnings decline: its capex of $808 million in the second quarter was more than double the previous year, yet it still lost a prominent customer's next-generation AI buildout. Wells Fargo analysts had highlighted the SpaceX AI division as a hardware partner with AMD as recently as June, underscoring how quickly the competitive picture changed.

The Financing Question and Circular Deal Risk

Wall Street's next focus is how SpaceX will pay for this buildout. Analysts, including Reitzes, are circling the possibility that financing could involve circular arrangements—potentially with Nvidia itself acting as a backer. If Nvidia helps finance the very infrastructure it supplies, that would tie the two companies together financially, raising questions about how much of Nvidia's projected demand is supported by its own capital.

What to Watch as Nvidia's August 26 Report Tests the SpaceX Bet

  • Mark August 26: Nvidia's fiscal second-quarter report is the next hard data point. Watch whether Jensen Huang confirms or walks back the scale of demand implied by Musk's SpaceX commitment.
  • Treat the $200 billion 2027 revenue estimate as an upper-bound scenario: Musk called his own per-gigawatt revenue assumptions "just a guess" and said the 20-gigawatt target may land near 15.
  • For AMD investors, the key question is whether the SpaceX loss signals a broader shift to Nvidia-only procurement among hyperscalers, or a one-off decision. AMD's doubled capex shows it is spending to defend its position.
  • Follow how the buildout is financed. If Nvidia participates in funding, it could create circularity that changes how investors should interpret Nvidia's order book.

Risk & Opportunity Assessment

Commercial RiskHighSpaceX's $18.4B quarterly capex already exceeded estimates, and the buildout relies on Musk's own admission that his $30–50B per-gigawatt revenue estimate is "just a guess," leaving the projected $200B Nvidia revenue as an unproven scenario.
Competitive RiskMediumNvidia's exclusive partnership with SpaceX tightens its grip on AI chip demand, while AMD loses a previously highlighted hardware partner despite doubling capex to $808M; the shift could accelerate if other hyperscalers follow SpaceX's single-vendor approach.
Regulatory RiskLowNo regulatory or antitrust issue is cited in the story, though large AI-infrastructure commitments could eventually attract scrutiny.
Reputation RiskMediumMusk publicly called his revenue assumptions "just a guess" and acknowledged the 20GW target may fall to about 15GW, which could dent confidence in SpaceX's AI spending narrative and the reliability of its projections.
Technology DisruptionTransformationalIf the roughly 6GW, $200B scenario materializes, it would transform Nvidia's revenue base and validate CEO Jensen Huang's $1T annual revenue target, marking a step-change in AI infrastructure scale.
Commercial OpportunityHighWolfe Research's estimate of close to $200B in potential calendar-2027 revenue for Nvidia from SpaceX alone, at $35B per gigawatt, points to a major upside for the chipmaker.